EXHIBIT 99.1
NEWS RELEASE
Entegris, Inc.
Corporate Headquarters
3500 Lyman Boulevard
Chaska Minnesota 55318 USA
Tel. 952-556-3131
Steve Cantor
VP of Corporate Relations
Tel. 978-436-6750
irelations@entegris.com
Entegris Reports Results for Fourth Quarter of Fiscal 2007
CHASKA (Minneapolis), Minn., February 12, 2008 –Entegris, Inc. (Nasdaq: ENTG) today reported its financial results for its fiscal fourth quarter ended December 31, 2007. Highlights for the quarter included:
| • | | Sales of $161.3 million, up 6% sequentially |
| • | | Inventories declined $8.0 million |
| • | | Cash flow from operations in excess of $25 million |
Fourth-quarter sales were $161.3 million, versus $167.3 million for the prior-year period and $151.8 million for the third quarter of fiscal 2007.
Fourth-quarter net income was $10.8 million, or $0.09 per diluted share. Fourth-quarter net income was favorably impacted by an $8.0 million tax benefit related to the previously announced intercompany dividend from the Company’s Japanese subsidiary. On a non-GAAP basis, fourth-quarter net income was $16.6 million, or $0.14 per diluted share. The non-GAAP result is adjusted to exclude the effect of merger-related and other restructuring charges. A reconciliation of GAAP to non-GAAP results is provided elsewhere in this release. The fourth-quarter results include total pretax stock-based compensation of $1.9 million, or $0.01 per diluted share.
Sales for the twelve months ended December 31, 2007, were $626.2 million. Net income was $44.4 million, or $0.36 per diluted share, which included a loss from discontinued operations of $2.0 million. On a non-GAAP basis, net income was $59.8 million, or $0.48 per diluted share.
Gideon Argov, president and chief executive officer, said: “Sales trends in the fourth quarter remained strong through the end of December, despite signs of slowing capital spending in the semiconductor industry. The growth in the quarter was reflected in both our unit-driven products and capital-driven products. Sales of consumable filtration products and gas microcontamination products reflected demands from our customers for yield and productivity enhancement through sophisticated contamination control.”
Argov added: “Ending inventory of $73 million was reduced by $8 million in the quarter and $20 million for the full year. The inventory reduction contributed to strong cash flow for the quarter, but negatively impacted our gross margin due to the lower production levels.”
For fiscal 2007, the Company generated over $125 million in cash from operations and ended the quarter with $161 million of cash and cash equivalents.
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Outlook
“Looking forward to 2008, indications are that capital spending in the industry will be soft at least through the first half of the year. Accordingly, we expect sales for the first quarter ending March 29, 2008 to be approximately $142 million to $150 million. Given the anticipated revenue levels in the first quarter and the general uncertainty in the industry and the economy, we are taking steps to reduce our costs. Excluding any impact from these cost reduction measures, we expect GAAP net income per diluted share in the first quarter to range from $0.03 to $0.05” Argov said.
The Company indicated that beginning in the first quarter of fiscal 2008 it will no longer report its results on a non-GAAP basis.
Fourth-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the 2007 fourth quarter on Tuesday, February 12, 2008, at 10:00 a.m. Eastern Time. Participants should dial 1-888-220-8449 (domestic callers) or 1-913-981-5530 (callers outside the U.S.); all callers should use passcode 7897432. A replay of the call can be accessed at 1-719-457-0820 using the same passcode. The webcast of the call may be accessed from the investor relations portion of the Entegris website at www.entegris.com.
ABOUT ENTEGRIS
Entegris is a leading provider of a wide range of products for purifying, protecting and transporting critical materials used in processing and manufacturing in semiconductor and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.
NON-GAAP INFORMATION
In addition to reporting results that are determined in accordance with generally accepted accounting principles in the U.S. (GAAP), the Company also reports non-GAAP results of operations that exclude certain expenses and charges. These non-GAAP results are provided as a complement to results provided in accordance with GAAP in order to provide investors with relevant and useful information about the Company’s ongoing operations. As such, non-GAAP information primarily excludes expenses and charges resulting from purchase accounting and integration activities associated with the Company’s August 2005 merger with Mykrolis Corporation and the August 2007 acquisition of the specialty coating business of Surmet Corporation. A reconciliation of GAAP to non-GAAP financial information discussed in this release is contained in the attached exhibits and on the Company’s website atwww.entegris.com.
Forward-Looking Statements
Certain information contained in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current management expectations only as of the date of this press release, which involve substantial risks and uncertainties that could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. Statements which are modified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “may,” “will,” “should” or the negative thereof and similar expressions as they relate to Entegris or our management are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. These risks include, but are not limited to, fluctuations in the market price of Entegris’ stock, future operating results of Entegris, other acquisition and investment opportunities available to Entegris, general business and market conditions and other factors. Additional information concerning these and other risk factors may be
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found in previous financial press releases issued by Entegris and Entegris’ periodic public filings with the Securities and Exchange Commission, including the discussion described under the headings “Risks Relating to our Business and Industry,” “Manufacturing Risks,” “International Risks,” and “Risks Related to Securities Markets and Ownership of Our Securities” in Item 1A of our Annual Report on Form 10–K for the fiscal year ended December 31, 2006, as well as other matters and important factors disclosed previously and from time to time in the filings of Entegris with the U.S. Securities and Exchange Commission. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we undertake no obligation to update publicly any forward-looking statements contained herein.
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Entegris, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended | | | Twelve months ended | |
| | | Dec. 31, 2007 | | | Dec. 31, 2006 | | | Dec. 31, 2007 | | | Dec. 31, 2006 | |
Net sales | | $ | 161,348 | | | $ | 167,300 | | | $ | 626,238 | | | $ | 672,882 | |
Cost of sales(a) | | | 94,623 | | | | 97,868 | | | | 360,001 | | | | 367,804 | |
| | | | | | | | | | | | | | | | |
Gross profit | | | 66,725 | | | | 69,432 | | | | 266,237 | | | | 305,078 | |
Selling, general and administrative expenses(b) | | | 48,548 | | | | 41,777 | | | | 182,792 | | | | 188,311 | |
Engineering, research and development expenses | | | 10,105 | | | | 9,404 | | | | 39,727 | | | | 38,074 | |
| | | | | | | | | | | | | | | | |
Operating income | | | 8,072 | | | | 18,251 | | | | 43,718 | | | | 78,693 | |
Interest expense (income), net | | | 271 | | | | (2,439 | ) | | | (5,245 | ) | | | (9,205 | ) |
Other (income) loss, net (c) | | | (1,659 | ) | | | 637 | | | | (7,656 | ) | | | (1,658 | ) |
| | | | | | | | | | | | | | | | |
Income before income taxes | | | 9,460 | | | | 20,053 | | | | 56,619 | | | | 89,556 | |
Income tax (benefit) expense | | | (1,614 | ) | | | 3,951 | | | | 10,356 | | | | 26,936 | |
Equity in net (earnings) of affiliates | | | (85 | ) | | | (243 | ) | | | (93 | ) | | | (531 | ) |
| | | | | | | | | | | | | | | | |
Income from continuing operations | | | 11,159 | | | | 16,345 | | | | 46,356 | | | | 63,151 | |
(Loss) income from discontinued operations, net of taxes | | | (377 | ) | | | (246 | ) | | | (1,997 | ) | | | 315 | |
| | | | | | | | | | | | | | | | |
Net income | | $ | 10,782 | | | $ | 16,099 | | | $ | 44,359 | | | $ | 63,466 | |
| | | | | | | | | | | | | | | | |
| | | | |
Basic income (loss) per common share: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.10 | | | $ | 0.13 | | | $ | 0.38 | | | $ | 0.47 | |
Discontinued operations | | $ | 0.00 | | | $ | 0.00 | | | ($ | 0.02 | ) | | $ | 0.00 | |
Net income | | $ | 0.09 | | | $ | 0.12 | | | $ | 0.36 | | | $ | 0.47 | |
Diluted income (loss) per common share: | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.10 | | | $ | 0.12 | | | $ | 0.37 | | | $ | 0.46 | |
Discontinued operations | | $ | 0.00 | | | $ | 0.00 | | | $ | (0.02 | ) | | $ | 0.00 | |
Net income | | $ | 0.09 | | | $ | 0.12 | | | $ | 0.36 | | | $ | 0.46 | |
Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
Basic | | | 114,475 | | | | 130,594 | | | | 122,557 | | | | 135,116 | |
Diluted | | | 115,819 | | | | 134,024 | | | | 124,940 | | | | 138,492 | |
| a) | | Cost of sales for the three months and twelve months ended December 31, 2007 include $2.6 million and $3.8 million, respectively, of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. Cost of sales for the three months and twelve months ended December 31, 2006 include $0.3 million and $2.4 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. |
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| b) | | Selling, general and administrative expenses for the three months and twelve months ended December 31, 2007 include $4.7 million and $19.4 million, respectively, of merger-related and other restructuring charges, integration expense, integration-related stock-based compensation expense, and merger-related amortization of intangibles. Selling, general and administrative expenses for the three months and twelve months ended December 31, 2006 include $5.3 million and $31.1 million, respectively, of merger-related and other restructuring charges, integration expense, integration-related stock-based compensation expense, and merger-related amortization of intangibles. |
| c) | | Other income, net for the twelve months ended December 31, 2007 includes a $6.1 million gain from the sale of an equity investment. |
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Entegris, Inc.
GAAP to Non-GAAP Reconciliation of Statement of Operations
For the Three Months Ended December 31, 2007
(in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | | U.S. GAAP | | | Adjustments | | | Non-GAAP | |
Net sales | | $ | 161,348 | | | | — | | | $ | 161,348 | |
Cost of sales(a) | | | 94,623 | | | | 2,629 | | | | 91,994 | |
| | | | | | | | | | | | |
Gross profit | | | 66,725 | | | | (2,629 | ) | | | 69,354 | |
Selling, general and administrative expenses(b) | | | 48,548 | | | | 4,710 | | | | 43,838 | |
Engineering, research and development expenses | | | 10,105 | | | | — | | | | 10,105 | |
| | | | | | | | | | | | |
Operating income | | | 8,072 | | | | (7,339 | ) | | | 15,411 | |
Interest expense, net | | | 271 | | | | — | | | | 271 | |
Other income, net | | | (1,659 | ) | | | — | | | | (1,659 | ) |
| | | | | | | | | | | | |
Income before income taxes | | | 9,460 | | | | (7,339 | ) | | | 16,799 | |
Income tax (benefit) expense | | | (1,614 | ) | | | (1,563 | ) | | | (51 | ) |
Equity in net income of affiliates | | | (85 | ) | | | — | | | | (85 | ) |
| | | | | | | | | | | | |
Income from continuing operations | | | 11,159 | | | | (5,776 | ) | | | 16,935 | |
Loss from discontinued operations, net of taxes | | | (377 | ) | | | — | | | | (377 | ) |
| | | | | | | | | | | | |
Net income | | $ | 10,782 | | | $ | (5,776 | ) | | | 16,558 | |
| | | | | | | | | | | | |
Basic income (loss) per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.10 | | | $ | (0.05 | ) | | $ | 0.15 | |
Discontinued operations | | $ | 0.00 | | | | — | | | $ | 0.00 | |
Net income per common share | | $ | 0.09 | | | $ | (0.05 | ) | | $ | 0.14 | |
Diluted income (loss) per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.10 | | | $ | (0.05 | ) | | $ | 0.15 | |
Discontinued operations | | $ | 0.00 | | | | — | | | $ | 0.00 | |
Net income per common share | | $ | 0.09 | | | $ | (0.05 | ) | | $ | 0.14 | |
Weighted average shares outstanding: | | | | | | | | | | | | |
Basic | | | 114,475 | | | | 114,475 | | | | 114,475 | |
Diluted | | | 115,819 | | | | 115,819 | | | | 115,819 | |
| a) | | Cost of sales is adjusted for $2.6 million of merger-related and other restructuring charges and integration-related stock-based compensation expense. |
| b) | | Selling, general and administrative expenses are adjusted for $0.2 million of integration expense and other restructuring, $0.3 million of integration-related stock-based compensation expense, and $4.2 million of merger-related amortization of intangibles. |
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Entegris, Inc.
GAAP to Non-GAAP Reconciliation of Statement of Operations
For the Three Months Ended December 31, 2006
(in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | | U.S. GAAP | | | Adjustments | | | Non-GAAP | |
Net sales | | $ | 167,300 | | | | — | | | $ | 167,300 | |
Cost of sales(a) | | | 97,868 | | | | 341 | | | | 97,527 | |
| | | | | | | | | | | | |
Gross profit | | | 69,432 | | | | (341 | ) | | | 69,773 | |
Selling, general and administrative expenses(b) | | | 41,777 | | | | 5,297 | | | | 36,480 | |
Engineering, research and development expenses | | | 9,404 | | | | — | | | | 9,404 | |
| | | | | | | | | | | | |
Operating income | | | 18,251 | | | | (5,638 | ) | | | 23,889 | |
Interest income, net | | | (2,439 | ) | | | — | | | | (2,439 | ) |
Other expense, net | | | 637 | | | | — | | | | 637 | |
| | | | | | | | | | | | |
Income before income taxes | | | 20,053 | | | | (5,638 | ) | | | 25,691 | |
Income tax expense | | | 3,951 | | | | (929 | ) | | | 4,880 | |
Equity in net earnings of affiliates | | | (243 | ) | | | — | | | | (243 | ) |
| | | | | | | | | | | | |
Income from continuing operations | | | 16,345 | | | | (4,709 | ) | | | 21,054 | |
Loss from discontinued operations, net of taxes | | | (246 | ) | | | — | | | | (246 | ) |
| | | | | | | | | | | | |
Net income | | $ | 16,099 | | | $ | (4,709 | ) | | $ | 20,808 | |
| | | | | | | | | | | | |
Basic income per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.13 | | | $ | (0.04 | ) | | $ | 0.16 | |
Discontinued operations | | $ | 0.00 | | | | — | | | $ | 0.00 | |
Net income per common share | | $ | 0.12 | | | $ | (0.04 | ) | | $ | 0.16 | |
Diluted income per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.12 | | | $ | (0.04 | ) | | $ | 0.16 | |
Discontinued operations | | $ | 0.00 | | | | — | | | $ | 0.00 | |
Net income per common share | | $ | 0.12 | | | $ | (0.04 | ) | | $ | 0.16 | |
Weighted average shares outstanding: | | | | | | | | | | | | |
Basic | | | 130,594 | | | | 130,594 | | | | 130,594 | |
Diluted | | | 134,024 | | | | 134,024 | | | | 134,024 | |
| a) | | Cost of sales includes $0.3 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. |
| b) | | Selling, general and administrative expenses include $5.3 million of merger-related and other restructuring charges, integration expense, integration-related stock-based compensation expense, and merger-related amortization of intangibles. |
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Entegris, Inc.
GAAP to Non-GAAP Reconciliation of Statement of Operations
For the Twelve Months Ended December 31, 2007
(in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | | U.S. GAAP | | | Adjustments | | | Non-GAAP | |
Net sales | | $ | 626,238 | | | | — | | | $ | 626,238 | |
Cost of sales(a) | | | 360,001 | | | | 3,821 | | | | 356,180 | |
| | | | | | | | | | | | |
Gross profit | | | 266,237 | | | | (3,821 | ) | | | 270,058 | |
Selling, general and administrative expenses(b) | | | 182,792 | | | | 19,360 | | | | 163,432 | |
Engineering, research and development expenses | | | 39,727 | | | | — | | | | 39,727 | |
| | | | | | | | | | | | |
Operating income | | | 43,718 | | | | (23,181 | ) | | | 66,899 | |
Interest income, net | | | (5,245 | ) | | | — | | | | (5,245 | ) |
Other income, net (c) | | | (7,656 | ) | | | (6,068 | ) | | | (1,588 | ) |
| | | | | | | | | | | | |
Income before income taxes | | | 56,619 | | | | (17,113 | ) | | | 73,732 | |
Income tax expense | | | 10,356 | | | | (1,686 | ) | | | 12,042 | |
Equity in net earnings of affiliates | | | (93 | ) | | | — | | | | (93 | ) |
| | | | | | | | | | | | |
Income from continuing operations | | | 46,356 | | | | (15,427 | ) | | | 61,783 | |
Loss from discontinued operations, net of taxes | | | (1,997 | ) | | | — | | | | (1,997 | ) |
| | | | | | | | | | | | |
Net income | | $ | 44,359 | | | $ | (15,427 | ) | | $ | 59,786 | |
| | | | | | | | | | | | |
Basic income (loss) per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.38 | | | $ | (0.13 | ) | | $ | 0.50 | |
Discontinued operations | | $ | (0.02 | ) | | | — | | | $ | (0.02 | ) |
Net income | | $ | 0.36 | | | $ | (0.13 | ) | | $ | 0.49 | |
Diluted income (loss) per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.37 | | | $ | (0.12 | ) | | $ | 0.49 | |
Discontinued operations | | $ | (0.02 | ) | | | — | | | $ | (0.02 | ) |
Net income | | $ | 0.36 | | | $ | (0.12 | ) | | $ | 0.48 | |
Weighted average shares outstanding: | | | | | | | | | | | | |
Basic | | | 122,557 | | | | 122,557 | | | | 122,557 | |
Diluted | | | 124,940 | | | | 124,940 | | | | 124,940 | |
| a) | | Cost of sales includes $3.8 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. |
| b) | | Selling, general and administrative expenses include $19.4 million of merger-related and other restructuring charges, integration expense, integration-related stock-based compensation expense, and merger-related amortization of intangibles. |
| c) | | Other income, net includes a $6.1 million gain from the sale of a minority investment interest. |
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Entegris, Inc.
GAAP to Non-GAAP Reconciliation of Statement of Operations
For the Twelve Months Ended December 31, 2006
(in thousands, except per share data)
(Unaudited)
| | | | | | | | | | | | |
| | | U.S. GAAP | | | Adjustments | | | Non-GAAP | |
Net sales | | $ | 672,882 | | | | — | | | $ | 672,882 | |
Cost of sales(a) | | | 367,804 | | | | 2,446 | | | | 365,358 | |
| | | | | | | | | | | | |
Gross profit | | | 305,078 | | | | (2,446 | ) | | | 307,524 | |
Selling, general and administrative expenses(b) | | | 188,311 | | | | 31,121 | | | | 157,190 | |
Engineering, research and development expenses | | | 38,074 | | | | — | | | | 38,074 | |
| | | | | | | | | | | | |
Operating income | | | 78,693 | | | | (33,567 | ) | | | 112,260 | |
Interest income, net | | | (9,205 | ) | | | — | | | | (9,205 | ) |
Other income, net | | | (1,658 | ) | | | — | | | | (1,658 | ) |
| | | | | | | | | | | | |
Income before income taxes | | | 89,556 | | | | (33,567 | ) | | | 123,123 | |
Income tax expense | | | 26,936 | | | | (7,824 | ) | | | 34,760 | |
Equity in net earnings of affiliates | | | (531 | ) | | | — | | | | (531 | ) |
| | | | | | | | | | | | |
Income from continuing operations | | | 63,151 | | | | (25,743 | ) | | | 88,894 | |
Income from discontinued operations, net of taxes | | | 315 | | | | — | | | | 315 | |
| | | | | | | | | | | | |
Net income | | $ | 63,466 | | | $ | (25,743 | ) | | $ | 89,209 | |
| | | | | | | | | | | | |
Basic income per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.47 | | | $ | (0.19 | ) | | $ | 0.66 | |
Discontinued operations | | $ | 0.00 | | | | — | | | $ | 0.00 | |
Net income | | $ | 0.47 | | | $ | (0.19 | ) | | $ | 0.66 | |
Diluted income per common share: | | | | | | | | | | | | |
Continuing operations | | $ | 0.46 | | | $ | (0.19 | ) | | $ | 0.64 | |
Discontinued operations | | $ | 0.00 | | | | — | | | $ | 0.00 | |
Net income | | $ | 0.46 | | | $ | (0.19 | ) | | $ | 0.64 | |
Weighted average shares outstanding: | | | | | | | | | | | | |
Basic | | | 135,116 | | | | 135,116 | | | | 135,116 | |
Diluted | | | 138,492 | | | | 138,492 | | | | 138,492 | |
| a) | | Cost of sales includes $2.4 million of merger-related and other restructuring charges, integration expenses, and integration-related stock-based compensation expense. |
| b) | | Selling, general and administrative expenses include $31.1 million of merger-related and other restructuring charges, integration expense, integration-related stock-based compensation expense, and merger-related amortization of intangibles. |
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Entegris, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
| | | | | | |
| | | December 31,
2007 | | December 31,
2006 |
ASSETS | | | | | | |
Cash, cash equivalents and short-term investments | | $ | 160,655 | | $ | 274,974 |
Accounts receivable | | | 112,053 | | | 127,396 |
Inventories | | | 73,120 | | | 93,426 |
Deferred tax assets | | | 21,376 | | | 45,149 |
Other current assets and assets held for sale | | | 13,555 | | | 15,376 |
| | | | | | |
Total current assets | | | 380,759 | | | 556,321 |
Property, plant and equipment, net | | | 121,157 | | | 120,987 |
Intangible assets | | | 478,513 | | | 463,408 |
Deferred tax asset – non-current | | | 22,425 | | | 5,157 |
Other assets | | | 27,897 | | | 11,745 |
| | | | | | |
Total assets | | $ | 1,030,751 | | $ | 1,157,618 |
| | | | | | |
| | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
Current maturities of long-term debt and short-term borrowings | | $ | 27,112 | | $ | 401 |
Accounts payable | | | 24,260 | | | 24,952 |
Accrued liabilities | | | 57,623 | | | 56,479 |
Income tax payable | | | 6,895 | | | 10,025 |
Liabilities of discontinued operations | | | 4,225 | | | 842 |
| | | | | | |
Total current liabilities | | | 120,115 | | | 92,699 |
Long-term debt, less current maturities | | | 20,373 | | | 2,995 |
Other liabilities | | | 37,306 | | | 45,944 |
Shareholders’ equity | | | 852,957 | | | 1,015,980 |
| | | | | | |
Total liabilities and shareholders’ equity | | $ | 1,030,751 | | $ | 1,157,618 |
| | | | | | |
### END ###
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